India’s latest financial hub in Gujarat is expected to see real-time dollar settlement become operational either this year or early next year, a senior official revealed.
In an interview with Bloomberg News, K Rajaraman, Chairman, International Financial Services Authority, said that the service would become operational soon and would help make the country more lucrative for foreign investors. The report noted that the service would help save time and reduce delays and would be accessible for financial firms in Gujarat International Finance Tec-City.
The project remains a flagship one for Prime Minister Narendra Modi. The real-time dollar settlement service would help increase the speed for transactions as the country receives increasing interest from foreigners. Notably, the sovereign bonds of the nation are scheduled to be included in the JP Morgan Chase & Co’s emerging market index.
The report quoted Rajaraman and said, “If your cash movement become faster and more efficient, then it will have a positive ripple effect upon the rest of the market.”
The IFSCA oversees the hub, also known as GIFT City, offers stocks, currency, and derivative trading services.
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The official noted that the settlement system would help enhance efficiency. Notably, India levies capital controls and has a multi-layered tax structure and these complications have been eased for the financial hub to make it a lucrative trading destination like Singapore and Dubai.
Notably, the Reserve Bank of India last year launched a domestic non-deliverable forward market settled in dollars at the GIFT City. Currently, most of the cross-border transactions depend on several correspondent banks, and this leads to an increase in cost for settlements and also delays the process. As such, globally, there are active efforts underway to help make sending money across borders quicker and smoother.